Since Factiva was founded by the two parent companies in 1999 it has recorded consistent growth and gone on to become the leading global supplier of archival news and business information.
Under the terms of the deal Factiva will become a subsidiary of Dow Jones. Reuters will continue to supply its news to Factiva under an agreement as a paid supplier and will enter into or continue a number of commercial arrangements with Factiva and Dow Jones.
The sale and other arrangements as a whole are expected to be neutral to Reuters adjusted earnings in 2007 and 2008, which exclude profit on disposals among other items.*
Tom Glocer, Reuters Chief Executive, said: âDow Jones has been a very good partner and together we have built a valuable asset in Factiva. We view this transaction as the natural conclusion to this successful joint venture. We wish Dow Jones every success in taking Factiva to the next phase of its evolution.â
Final proceeds will include, in addition to the $160 million total consideration, half of all cash remaining on Factivaâs balance sheet after settlement of any outstanding inter company items, and will be subject to adjustment based on the working capital of Factiva at closing. In connection with the transactions, Reuters has agreed not to compete with Factivaâs core business for a two-year period, and to continue the exclusivity arrangements currently in place with respect to certain Reuters content provided to Factiva.